If you start committing one of the three funding errors of the following work, you strongly reduce your chances of long-term commercial success. And to be a success in business, you have to think long term. The monitoring record and reputation in companies are earned over time. A good value for money is largely judged on financial success and financial success in companies is largely considered through the review of professional accounts. Good business accounts demonstrate banks, financiers, colleagues, etc., that you are a banking business person and get them to put their faith and money to you and your businesses.
By not committing any of the 3 finance errors of the following activities, you will have at least good financial indicators and that you can respond to the financial situation of companies on time. The key here is to understand both the causes and meaning of each.
Error financing companies n ° 1 – no monthly accounting.
Whatever the size of your business, the conservation of inaccurate records creates all kinds of problems related to cash flow, planning and commercial decision-making. In a word, your company is doomed if you do not make monthly accounting.
Accounting services are too expensive compared to most other costs than a business will. Accounting must be carried out on a monthly basis with management accounts so that your financial records are always up to date and that you can consult the financial situation of the company (profit and loss, balance sheet, etc.) once a Accounting process is established, the costs and the time involved generally decrease. In itself, this error tends to drive all the others in one way or another and must be avoided at all costs.
Business Financing Errors # 2 – No projected cash flow and budget
Having significant accounting creates a lack of knowledge on where you are. And having no cash flow and planned budget creates a lack of knowledge on where you go. Without the conservation score, a company tends to deviate further and further from its objectives and invites a crisis that requires the company to change monthly expenditure and fund management habits. A projected cash flow above all must be realistic. You must project both a scenario in the best case and the worst case based on projected sales and business expenses. It’s a good idea to target the case scenario, but know how the company would react if the worst scenario is transpired.
Business Financing Errors # 3 – Inadequate Credit Control
There is nothing worse than making sales, doing the work, to send your client an invoice, then not to be paid in time … or worse still not to be paid at all! It is a well established fact that the larger debt of the debt of which it will be collected. Typical credit conditions in most established companies are 30 days. However, because of a culture among some customers to pay the end of the late companies and small businesses that do not operate a strict credit control, a company can often not be paid in time and the rapid shell of the silver. So, how do you avoid that? Well, there are many steps you can take, but the following 3 steps will help you make sure you are always paid … and paid in time.
1. Appoint someone in the company to be responsible for credit control. It is essential that someone is responsible for sending invoices and statements; Recalling the customer that payment is due, manipulate requests on invoices, etc.
2. Strengthen your payment terms on your contracts, on your website, on your invoices, etc. It is important that customers are aware of your payment terms and the consequences of late payment (cessation of service, accusations of interest, etc.)
3. Send your bills on time and include an account instruction with each invoice. If you do not send your invoice at the end of each month, how can you expect to be paid before the end of the following month